The Ramsey Show - App - Should I Take On Debt To Start a New Career? (Hour 2)

Episode Date: September 23, 2021

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🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studio, this is the Ramsey Show. It's where America hangs out to have a conversation about your life, your money, your relationships. We'll talk about your work and purpose. I'm Ken Coleman, joined by my colleague, Rachel Cruz. We are here for you this hour. It is a free phone call, 888-825-5225, 888-825-5225. Let's get it started this hour in Austin, Texas, where Robbie joins us.

Robbie, how can we help? Hello. Thanks for taking my call. I just want to give you a quick question. We are on Baby Step 2. We have our starter emergency fund saved. I'm trying to figure out whether I should finish school or pay off all of our debt and our student loans. Our gross income is about $80,000 a year, and we have $99,000 in debt. Without any raises, I've estimated it to be paid off in like 3.9 years. But I'm trying to get a better idea of what I should do just because I've seen the debt-free screens, and that's really what I want more than I want the degree.

Right. How much do you have left in your degree? I've got two and a half years, but the thing about it is I've got about $50,000 in student loans, and I'm estimating at least another $30,000 to $40,000 in student loans. To finish? You know, to finish, yeah. Okay, so... And what's the degree in, Robbie? Are you doing it to advance in career? It would be a Bachelor's of Science in Psychology.

What are you doing now for work? Right now I'm a phlebotomist at a blood bank here in Austin, Texas. What did you go for the degree for? Did you want to move into that field? You know, I'd like to move into psychology as a counselor, but then also I'm going to need a master's, which is, you know, even more, even more money for school. Yeah. A couple things. Have you done your homework on other schools where you can get the degree to see if you can save just on tuition? I've looked into two different schools, one in Arizona and the other one was southern New Hampshire. And I think there's maybe a difference of $3,000, $4,000 per semester.

Yeah, it's an expensive degree. Okay, so is your wife working as well? Yes, we both work. What's your combined income? Combined income, our gross is just over $80,000. Okay, so that was the $80,000 number. And you've got 3.9 years if we stay at the $80,000. Yeah, to pay off just over $99,000. Yeah. Because you've got two years left on this program and because you can't cash flow your way through it,

yeah, I'm pressing pause. Because counseling is still going to be there. The dream job is still going to be there. And that's what you've got to hold on to. And I love that you led with the question because I think you've been considering that. Is that the way you were leaning before the call? Yeah.

I was leaning into hopefully paying this off because I just think it's just going to be so freeing to not have that and get a degree. How old are you, Robbie? I am 38. Okay. Awesome. Yeah. Yeah. There's a couple of dynamics there that I think are important because I think pressing pause is the wisest thing right now and paying off this debt because what can happen even in four years to even just the education market and what can open up of how to, and those classes, hopefully they don't expire or you're able to still have those credits because you've taken those courses, is possibly options to plug in somewhere else,

like Ken was saying, in four years. But also, Robbie, that in four years with no debts and then going to school on the side while working, and then you're going to want to launch into this, maybe be part of a counseling practice, start your own, whatever that looks like. It's almost like launching into this new thing. And when you launch into a new thing with no risk, a.k.a. having no debts that you're having to pay, it gives that transition even more peace, even more peace of being able to do it. Now, with the caveat that if you can find something to go cheaper,

like Ken was saying, and you're looking, and there's ways to go on the side and get that while you're still making the $80,000 and you're still able to pay it off. In that four years, if you're able to do both still simultaneously, that could be an option because I understand the feeling of if you feel drawn and called to something,

I hate that money becomes the blocker. But in this case, it has a little bit, Robbie, because of the financial hole that you guys are in with this almost $100,000. What is the, if $50,000 is student loans, because of the financial hole that you guys are in with this almost $100K. What is the, if $50,000 is student loans, what's the other $40,000? Oh, we're normal. We got a little bit of everything. Cars, credit cards, loans.

Yeah. Okay, what are your cars worth, and what do you owe on them? I think we're negative on those. I think one car we owe $19,000, and the other one $15,000. Yeah, well, let me tell you this. You can make up ground really quick if you're willing to drive something really, really cheap. And I've got a 15-year-old boy who's going to be 16 in November, so, Rachel, I've been all over used car sites. Yeah.

And you'd be surprised how decent of a car you can get for $5,000. I was going to say, you could get $25,000, Robbie, just by selling the cars and buying $5,000. Yeah, hustling to get those cars right side up, right? And then selling them and driving something really, really cheap. You're going to make up a lot of ground. That's a tremendous amount of money. And Robbie, I'm going to challenge the four years. Even just hearing you talk, I'm like, you guys, like guys like you said you've been normal and this is not to shame you

but you guys got to stop but you kind of have to get to a point where you said we're done we're done and we're cutting everything out of our lives we're cutting the expenses all this stuff we've just been floating through buying the cars we want charging stuff on credit cards like like it's got to tighten up so much and your life is going to drastically look different and i think if you guys commit to this change wholeheartedly with the idea of getting a degree in psychology to be a counselor as a motivator i bet you guys can do this way less than four years yeah i think you can't i think you guys have just been kind of moseying around which again that's not to shame you that is normal like you said but man if you guys if you guys went extreme and you did that

you sold the cars i mean that's 25 000 extra 5,000 cars sitting, paid for cars sitting in the driveway. I mean, if you do some stuff to really shake up what you guys have been doing, it's going to be uncomfortable. It's not going to be easy. But you guys, I'm like, you can clean this up. And by 43 years old, you could be living a totally different life and a different career and a different place financially. Yeah. Robbie, you've got two big motivators right now.

Rachel's right. This is like we're going nuclear here. We're pressing the red emergency button, and it's all in on everything, cutting your expenses, drastically selling everything, working an extra job because you're going to pause for right now maybe six months on the school. I agree with Rachel. I think if you get a lot of stuff paid off quickly, you could cash flow a class here and there while still going through the debt snowball. You have that ability. But I want you to think about two things here.

One, being debt-free, and two, having a debt-free practice. Not just debt-free personally, but then I'm going to counsel people. I'm going to love on the people that I have a heart for. And the reason you got into counseling, you know what it is, but you better keep that really close because the next couple years are going to be intense and they're going to be really hard. But you think about the people that you want

to sit knee-to-knee with, eyeball to eyeball, and help them with breakthrough in their life. That's your why. And it's worth it, but it's going to be hard. But the degree, it'll be there. And so will the dream job. Thank you, Robbie, for the call. You got this. But today's the day. You got to get serious. You got to make the change. And it's always worth it. All right, folks, don't move. More Ramsey Show coming up right around the corner. In an uncertain world, being a good steward of your money is more important than ever.

While some circumstances can't be controlled, there are items within your budget you can take charge of, such as your health care costs. For nearly 40 years, Christian Health Care Ministries, or CHM, has provided a budget-friendly means of sharing for medical bills when our members need it. Learn more by visiting chministries.org slash budget. That's chministries.org slash budget. Christian Health Care Ministries is a Ramsey-trusted provider. Welcome back, America. You are listening to The Ramsey Show.

I'm Ken Coleman, joined by my colleague, Rachel Cruz. The phone number is 888-825-5225. That's 888-825-5225. That's 888-825-5225. So a question for you folks. How many times in the past year have you heard someone say, I just wish things would get back to normal? But what was normal like for you? Were you worried about money? Was that your normal?

Well, you shouldn't have to go back to that, and there's so much better ahead for you. But to get the life you want, you've got to have a game plan. So join us for Game Plan Live. This is our free live stream on September the 28th. Dave Ramsey, Christy Wright, and George Campbell will be laying out the clear plan to make all of your money goals happen. You can have the abundant, balanced, debt-free life you want, and it all starts at Game Plan Live.

If you want to register for this live stream, text GAMEPLAN to 33789. That's GAMEPLAN, all one word. Text GAMEPLAN to 33789. All right, let's go to Binghamton, New York. Domenico is there. Domenico, how can we help hey hey my fiance turned me to your guys just this week on my 23rd birthday oh wow happy birthday yeah what a present that was check out these crazy people on this podcast you don't sound terribly excited about it either do you hate us

you can be honest no i've actually been listening to you guys very religiously all week. I've been listening to you guys at work, everything. I just bought Dave's book yesterday, Total Money Makers, and I've been reading it every night. Amazing. But my fiance and I were talking last night because we were going over our bills for the rest of the month. And she told me to call and get your guys' opinion because we can't figure out what to do. My car, I have a car payment, sadly. And my loan is like $15,762. And I pay $283.25 a month, but it's only Kelly Blue Book valued at $7,972. Yeah.

So we were trying to figure out would it be better just for me to get rid of the car or keep it or what to do because we're getting behind on bills and everything. We're just trying to get stuff figured out because we moved into our first apartment together just back in June. Okay. Okay, how much do you make a year? I want to say roughly maybe about $40,000. $40,000, okay. And what other debt do you have besides the car?

Just you, not your fiancé, just you. My credit cards, which I got a credit card for my car to fix it, which that I've used just for an oil change. Um, I got a car through Walmart and I got a, how much is, how much total do you think is in credit card debt? Uh, about a thousand, about a thousand. Okay. And that's all you have? No student loans. Yeah. And you're awesome. Okay. So I think for you, I mean, kind of our rule of thumb is if you can't pay off the car in 18 months, it needs to go 12 to 18 months. So if you don't think you can pay it off in a year that you can just, you know, work, you're working an extra job, selling stuff,

doing whatever you can to throw money at this car payment. Well, first the credit card. I want you to get rid of that thousand dollar credit card, cut out the credit cards when we get off the phone, if you haven't already. Get rid of those. Get a thousand dollars saved up, thousand dollars to your car. So you have about $2,000 to get this ball rolling, to get your emergency fund, and then to start attacking this car. So if you can't pay it off in 12 to 18 months, then yeah, my advice would be to sell it and you'll have to take a loan for the difference because you won't pay it off in 12 to 18 months, then yeah, my advice would be to sell it and you'll have to take a loan for the difference because you won't be able to get as much. You're not able to sell the car and then make some money off of it, obviously, because it's

gone down in value so much. But to take that loan, which will be obviously less than that, I mean, you'll have $8,000 left on that car loan and that's what you could attack instead of the $15,000 if that's what you choose unless you just decide to buckle down and attack the car payments and the car loan in the next

year. How much are you making, Dominica? $40,000. I make $16,000 an hour, but my yearly income is around $45,000. And what is that job? What are you doing? I work at a fabrication shop based out of Canada.

Where would you go to make extra money if you really went hard? You don't have kids, yes or no? No, no kids. So it's just you two, and this is your debt, not the two of you's debt. So what would you do? Could you pick up some more fabricating work around cars and stuff, make some really nice money per hour if you added another 15 to 30 hours a week? Yeah, I've already got a second job lined up.

I'm going to be working Friday, Saturday nights at a haunted attraction for the Halloween season. How much i'm going to be working like friday saturday nights at a haunted attraction for the halloween season how much is that going to pay you uh about like 250 a weekend because i'm only working two days a weekend yeah well good for you but i would really look at your other options i mean can you pick up some extra work you know messing around on cars or whatever just to maximize your income right now because you could knock this stuff out easily in nine months, 12 months, if you really just worked like a maniac. This is not that much money. Yeah, I've been putting applications out for second jobs anywhere. I've been putting applications at gas stations and all.

Hold on a second. Listen, man, you're worth way more than that. Don't put applications in to a gas station. You're a skilled tradesman. I mean, think about how many people you know in the car game. Am I right or am I wrong? Am I missing something?

Yeah, I'm completely looking at the bigger picture. I'm not looking at it. No, you're not. Dude, you're a skilled tradesman. I'd be looking for that kind of work where you could be making $18 an hour, $25 an hour, where the time is really paying off, not standing there holding a rope and letting a bunch of idiot teenagers walk through a haunted house. It's just not a good use of your time.

We've got to get serious. You have a real skill. Yeah. Yeah. What do you think? What do you think about that? Do you agree with me? I'm okay to be wrong.

Yeah. No, I'm agreeing with you. I'm just speechless because I've never really thought about it like that. I've always grown up with you get what you can get and don't feel fit. But now that you're saying it, now it's like... Well, I actually agree with that. I agree. I put myself in that.

But listen, get what you can get. And the haunted house ain't get what you can get. That's just get whatever's there. Go out there and get some skilled trades work that you're already qualified for, and you've got all kinds of connections. You're in that game already. You're a fabricator. That is a premium physical trade, man.

We're talking about can I make $500, $700 over a weekend. Let's set our sights a little bit bigger. Let's get a third job because, again, we're looking at $16,760 that you've got to pay off. And I know you're brand new to this, and I'm so glad you called, but I'm going to tell you something, man. If you start seeing yourself as a money-making machine, you'll go out and do that, and we won't settle for the haunted house thing. So here's a little challenge, Domenico.

I want you to go find some other work, and then call the haunted house people up and say, hey, I'm sorry. I got something better. You got a few weeks, haunted house people, to fill my spot, because I'm about to make three times of what I was going to make. Thank you. I love that, Ken. Well done.

Deuces. I'm out of here. I'm not doing that. But to give people the you know and again not that we're at a haunted house or gas station there's nothing wrong with no nothing wrong with that but the fact that you have the skill and to be able to value yourself yeah even more in the marketplace and again you're you've been in this for four days right just this week so there there is a level of all this that you're learning so much so i just want to applaud you

on that i'm just learning and saying hey what, what I'm doing, I want to do something different. And now your mind, you're starting to grow in that. Your mind is being expanded. And so this challenge Ken has given you is wonderful. So well done, Ken. I love hearing that and hearing you, Domenico, be like, man, okay, I can do this because you can. You can do this. Domenico, this is for your future bride your babies i mean you got

the chance to wipe this debt absolutely free in nine months 12 months at the most and your future is the best that you could possibly imagine the best is yet to be young man get after it this is the range Welcome back, America. You are listening to The Ramsey Show. I'm Ken Coleman, joined by my colleague, Rachel Cruz, and we're taking you through this hour, taking your money calls, your life calls, calls about your work and purpose, relationships and money, the whole nine yards. 888-825-5225 is the number to jump in.

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Use the promo code RAMSY to get the best deal. Rules and restrictions apply. Oh, thank you. Today's question is from Brandon from Illinois. He says, I'm 32 years old with a BS in computer science and psychology. I have been a software developer for the last year and realized recently that I hate it. I applied to a doctorate program in clinical psychology and got accepted.

I'm thrilled to have the opportunity to pursue my dream career, but I'm terrified by the perspective of debt to income ratio I'm facing when I graduate. I currently owe $31,000 of my undergrad degree in addition to the debt I'll take on for the program. I don't want to wait until I'm 50 to start my life because paying off debt. What should I do? All right, Brandon, let's turn down the drama queen knob just a tad bit. Yeah. You don't have to wait till you're 50.

It's okay. It's okay. But listen, Brandon, I mean, yeah, you should be terrified from the debt to income ratio because you got 31,000 and if you from the debt to income ratio because you got $31,000. And if you go into debt for a psychology degree and then you're going to have to get a master's in counseling. We just took a call similar to this in the last segment.

I mean, yeah, you're looking at could be $100,000 in the hole by the time you're all said and done. So, Brandon, if I were you, listen, software developer, yeah, it's not your dream job. You hate it. But listen, right now in this world, that can make some serious, serious money. So if I were you, if you even have to get one or two other licenses or what do they call them? Certificates? Certifications. Certifications in that genre just to up your income just a little bit more for maybe two to three years.

It's not going to be forever. Maybe till you're 35 and get the debt cleaned up, get some money saved, and then find a program that you can work through to get your master's where you can cash flow it. That's the goal, right? Because yes, while your dream is to get a doctorate in clinical psychology and to be able to do these things, it can easily turn into a nightmare if you're not making money in it because it's a new career path for you and you have all of this other debt

that you're in the hole for. So you're gonna have way more control, way more peace of mind, and wisdom comes into play for this. Yes, this feels good to jump in and just pursue the dream. And I want you to chime in on this, Ken, because you talk about this all the time,

but there's a wise path to do this where this setup doesn't become a curse to you, but it really becomes a blessing. Well, I think you're right about the drama queen stuff, and I think ultimately Brandon has to realize that this is a false narrative that you have to go into debt to achieve the dream. It's just simply false. This is insane intensity.

But if I was a 32-year-old software developer, I'd be looking for as much work as I could do, contract work, and it's out there. And developers make really good money. And if you looked at $2,500 a month, if you put $2,500 a month towards that debt, that's just over a year. You're knocking that out. Okay. Now, that same intensity to knock out the $31,000 undergrad debt gets applied to cash flowing your way through the doctorate program. Congratulations on getting accepted. Good news. You'll be accepted and it'll be waiting on you. And if they won't wait on you, someone else will take you. And I can tell you this, I'd love for you to get real honest about your why. Why are

you going into clinical psychology? What's the doctorate for? And I got to for you to get real honest about your why. Why are you going into clinical psychology? What's the doctorate for? And I've got to tell you, a very unhealthy, stressed out because of debt clinician is not going to do as good a work as a debt-free, very healthy clinician is going to do. And you're in the business helping people get whole and healthy. My goodness. How can you do that to the degree that you were created to do it if you're slam stressed over this? So you've created a false narrative. You can do it, but I'm going to tell you what's going to take. Incredible intensity and some patience. But here's the good news. Both of those are free. Those don't cost

anything except for serious commitment and conviction. So, hey, thank you for the question. 888-825-5225. Let's go to Modesto, California. John joins us there. John, how can we help? Hi, Ken. Hi, Rachel.

Thanks for everything you guys do. I appreciate you guys. Well, we appreciate you. What's up today? So, my wife and I, we own a small business and um we are halfway through our baby step two process currently on hold because we have a baby coming uh at the end of this year third third kid first son so okay well you know the good news is is that i can speak to this and so can rachel we both have three all right once you go from two to three, I've got to tell you,

you've already got this thing down. It's not going to be that stressful. I don't believe that. I promise. Don't trust him. No, no. Two to three is harder, but it's the boy, which is so fun. That's what we had, John, two girls and a boy.

Oh, yeah. That's very nice. But you're on baby. So you're on pause baby step two because pregnancy, which is great. Perfect. Piling up cash. The question is, is, um, so we, uh, have already paid off about $30,000. Um, we have about 30 more, a little over 30 more. Um, and when we pause, but, um, my wife has always been a little concerned at how much I wanted to pay at one time. And then I accidentally proved her right because a couple of months ago, right before we paused, we came into about $4,000 in vehicle repairs all at the same time with a couple of vehicles we have for the business. And so we actually ended up using up, you know, the emergency fund plus had to take some cash flow out of the business. And so we actually ended up using up, you know, the emergency fund plus had to

take some cash flow out of the business. So my question is, is how much running a small business while doing Baby Step 2, how much money should I keep around? And not just, you know, so that the business isn't vulnerable while we're trying to pay off this debt. Yeah, well, I think, John, for you guys, separating the businesses over here, personal is over here. And so it really is looking right. So in a personal standpoint, we talk about that $1,000 emergency fund and then everything goes. But when you're running a business, do you guys have employees? Do you have team members? Yeah. I mean, yeah. So, I mean, you guys are responsible for a lot on that end, right, in running a business. And so I think having two to three months worth of savings in the business side for business expenses specifically is a great plan to have.

Because, yeah, if you've got no savings in that and stuff starts happening in the business, you've got to pull money from somewhere. So having that safety net in the business side is, yeah, is very, very important. How much do you guys make a year? Right now, we've been taking home about $85,000. I plan on pulling that back until after we're done with the debt. I want to pull it back a little bit so that we can accomplish some goals as far as growth goes for the business. Yeah, absolutely. Take less personally.

But right now, while we are trying to pay off, that's what we're doing. Okay, that's great. And so, I mean, you guys can knock out the 30 grants, you know, rather quickly, making 85. No question. Yeah, I'd like to have it done by summertime of next year. Then I'll call you guys again. Yeah, absolutely. Absolutely, I love it.

Yeah, I like that. Well, John, you got this. Thank you so much for the call. I love, we've got this theme going on. We've got some young people that are just, they're just on the cusp of total breakthrough. Yeah. And they've got a plan.

John and his wife, they've got a plan. Small business, that's the dream. The baby coming in, the baby boy. I mean, it's really exciting to hear that. And I love how you stipulated when you are a sole proprietor or whatever and so your business is your sole income, you still

got to separate. That's really important and that gets confusing for a lot of people. What's the big danger there? Keeping it separate. Oh, is that you depend on that? I mean, it's kind of basic accounting. When the finances start getting muddled, you don't know what's going in, what's going out on what side, right? So keeping it very clean is very important. Just because you run it all doesn't mean that it needs to be all one account and all one philosophy.

So really good stuff. Thank you so much for the call, John. All right, don't move. We'll be back before you know it. This is The Ramsey Show. We'll be right back. Welcome back to The Ramsey Show. I'm Ken Coleman, and I'm joined in studio by my colleague, Rachel Cruz, and we are thrilled to have you with us. It is your show, America. It is a conversation about you, your future, your financial future, your professional future, your relationship future.

We're talking about you. We want to give you hope for a brighter future through clear steps forward. 888-825-5225, 888-825-5225. Let's go to Columbus, Ohio next. Patricia is there. Patricia, how can we help? Hi there. Thanks for taking my call, guys.

I appreciate what you do. Thank you. What's up? I have a question. So my mom, when the grandkids were born, she made it a point to gift them a life insurance policy and she paid for it. The agreement was she would pay for it for the first 18 years. And so she has purchased for my children a whole life $50,000 policy and she's been paying on it for the children um a whole life fifty thousand dollar policy and she's been paying on it for the past 18 years my son will be 18 now so it's going to be our our choice to either take it over um it will be mature in 2023 so it's a 30-year policy we can either take it over continue paying that premium or there's a cash value to it which we could cash that out um We got a late start.

We are on baby step 567 currently. So we did, but we did get a late start on saving for my son's college. So we're torn if we should cash this out and invest it or continue paying for this policy for him. And he'll have a fully mature $50,000 life insurance policy. And he may never have to, you know, buy insurance, you know, have to pay a lot of money for insurance as an adult. So I'm just kind of torn on which route to go. Yeah, it's a great question. The short answer is cash it out today. Whole life policies, Patricia, are terrible investments. And your son, while the heart of your mom was so good and so helpful,

the vehicle at which was probably sold to her, it's a terrible option because number one, kids don't need life insurance. You only need life insurance when someone is dependent upon your income. And for children, that is usually not the case unless there's some child actor or something making buku's money. Children don't need life insurance. And then they put it in an investment vehicle that makes on average like three to four percent, if that, in return versus, as an example, a good growth stock mutual fund on average will be anywhere from 10% to 12%. So there could have been three times the amount of money sitting in his account at 18 if they had chosen a different route.

So I'm saying all that today. I just want you to see the math side of why the purpose of having life insurance is unnecessary for him, and the investment that's within that is just horrible. It's horrible. So I would 100% cash this out. I would take the cash. And if you want to use it for college, I think that's a huge gift. That is tremendous. Or if there's a way for him to cash flow school or there's other money and he's able to take that investment and take it and open up a mutual fund or something for him further in the future,

then that's awesome too. So those are two options, college or reinvest or invest in the market. And then I'll say this as well, that there is a stigma that insurance is expensive. And I, and I heard you say, you know,

it'll be expensive, but term life insurance for a healthy young I heard you say, you know, it'll be expensive. But term life insurance for a healthy young person, once he starts a family, once he gets married, has kids and needs life insurance at that point, it is very inexpensive, actually. It's not expensive at all, a term life policy for 20, 30 years. And so he'll be able to still get life insurance at a really inexpensive rate while having an amazing investment on the side through that mutual fund or an investment in him if he chooses to use it for tuition for college. So does that make sense? All of that? I know I threw a lot at you because this is a really, there's a lot of layers to this idea and a lot

of parents have this, right? A whole life policy for their kids. And you hear it all the time. We actually have family members that this happened to them. They're like, what do we do? It's 18. I'm like, cash it out. So that's the reason behind that, Patricia.

Okay. And I figured as much, it just is, you know, I didn't want to make a decision. She's been paying on it for so long, and she's fine either way. Yes. So my next question, I guess, with the investment you mentioned, more so mutual fund, we would like for him to be able to cash flow college. Not sure that's going to be 100% doable for him.

And like I said, we've got a late start, but should we just put that into his 529 and let it go that way, or just have some more aggressive mutual funds separately where he just sits on it for a while? Yeah. Well, if you're going to be using it for tuition, I would just have it where it's liquid, where he can get to it so he can pay semester by semester or year per year. So even if it just sits, some of it just in a money market account and depending on how much is in the account, if you guys cash out today.

It's not, it's like $3, 3300 so he'll probably use yeah so he'll be using most of that just for tuition so yeah don't i would not invest it then if it's if he's going to use it for tuition put it in a money market account and it's there for him to help him through college got all right thank you patricia appreciate the call i mean it's you, here's what happens. This whole life policy, it gets sold as this really smart thing. And it's not very smart as you laid it out with the numbers. It is safe in the sense that, you know, it's just kind of like this little plods along, plods along, but it's essentially what you put in it is what you get back. You're just not getting anything out of it. Yeah. And for everyone to remember your investments, investments and insurance should never be together, ever.

So any product that is selling insurance with investment, it's a bad product. You want them separate. Because again, you can invest and make so much more on your return on a very conservative mutual fund. It doesn't have to be anything big and fancy, but you're going to still get two to three times the amount in that. And then you can buy insurance on the other side really inexpensively. And again, the younger you are, obviously, the less expensive insurance is. The healthier you are, the less expensive it is. But yeah, they force those together and make a terrible product that costs a lot of people. And what's hard too is I hear that. I'm like, man, I've heard that from

so many people. And it's like the heart of the person you know the grandmother was so good but you're like man he could have had she said what 3200 i mean he could have had 12 grand sitting in there he had 32 000 oh 32 000 i'm sorry yeah yeah so i mean but you're right you talk about the compound interest if you put that into 529 early on, and it just grows and grows and grows. I mean, it's unbelievable because the cost of college education right now is skyrocketing. I know. I mean, it is just extraordinary how quickly it's going up and how expensive it is. Let's see here. Do we have time?

Let's go to Lee in Houston, Texas. Lee, how can we help? Hey, thanks for taking my calls, guys. Hey, I was wondering, should I pay my house off, my mortgage off? My mortgage is, my balance is around $300,000. I'm 60 years old. I'm retired. My wife's retired. She just retired a couple months ago. She's 59. And so I'm thinking that's all the debt we have right now. That's it. We have both have RAs. I worked 29 years, well, really 32 years for an oil and gas,

a large oil and gas company. And my wife worked 33 years for the government. How much do you guys have in retirement? As of yesterday, $3,060,000. Hey! Way to go, Lee. Now, Lee, we only got about a minute and 20 seconds, so I want Rachel to be able to help you on this.

Do you have cash set aside from the retirement funds to be able to pay the house off? No, sir. No, sir. Really, cash, we don't have much at all. We have less than $20,000 in cash. But you got $3 million. We loaned everything to Vanguard. Okay.

And they just handle everything for us. Okay. And they send me about $5,000 a month, and my wife has a $60,000 pension. Okay. Okay. And she's 59, and you're how old? 60. 60, okay.

Because you guys quite are not at the age just to cash out the IRAs without a little bit of penalty, if I'm correct. I think it's 62, 65. I think the question is, can you guys go back to work? Can you go back to work and work a job? And you don't have to, but can you to be able to really attack them? I plan to do that. Well, there you go.

Yes, I plan to go back to work. But I'm going to do my – I'm planning on getting an enclosed trailer and doing handyman work. All right, listen, you can do this. Don't touch that retirement fund. Don't touch it. You want to attack the house? Attack the house on the side,

then once you're at the age, you're able to cash everything out. You got three and a half million. I think you said three million. You're going to be fine, Lee. Great, Lee. Congratulations, Everyday Millionaire. Hey, I want to thank Rachel Cruz,

our producer James Childs, our associate producer Jenna Sears, and you, America. This is The Ramsey show. This is James Childs, producer of the Ramsey show. Did you know the Ramsey show is one of the most popular podcasts in the world? Subscribe or follow today, wherever you listen to podcasts.